Investing.com - The pound held gains against the U.S. dollar on Tuesday, hovering close to a two-month high as risk sentiment remained supported by hopes for a fresh intervention by the European Central Bank to stem the debt crisis in the euro zone.
GBP/USD hit 1.5778 during European afternoon trade, the pair’s highest since June 20; the pair subsequently consolidated at 1.5754, adding 0.28%.
Cable was likely to find support at 1.5673, the low of August 17 and resistance at 1.5847, the high of May 22.
Sentiment was boosted after the U.K.’s Telegraph newspaper said earlier that it could confirm weekend reports that the European Central Bank may set a cap on peripheral euro zone bond yields at its next policy meeting in September.
On Monday, the ECB dismissed the reports, saying it was “misleading” to report on decisions which have not yet been taken.
Speculation over the possibility of ECB intervention saw Spanish borrowing costs fall at an auction of short-term government debt, with Madrid successful auctioning EUR4.5 billion of bills, the top end of the target range.
Investors were also eyeing a series of highly anticipated euro zone meetings later this week, amid hopes that leaders would make some progress on steps to the stem the crisis in the region.
Luxemburg’s Prime Minister Jean-Claude Juncker, who also heads the group of euro zone finance ministers, was to hold talks with Greek Prime Minister Antonis Samaras on Wednesday, to discuss a two-year extension of the country’s economic reform program.
German Chancellor Angela Merkel is to meet with French President Francois Hollande on Thursday, while Antonis Samaras is to meet with the French and German leaders later in the week.
In the U.K., the National Statistics Office said that public sector net borrowing posted a surplus of GBP1.8 billion in July, compared to a deficit of GBP12.2 billion in June.
Analysts had expected U.K. public sector net borrowing to post a surplus of GBP2.5 billion in July.
The U.K. has now borrowed GBP47.2 billion in the current financial year, over GBP11 billion more than a year ago.
Sterling was lower against the euro with EUR/GBP rising 0.39%, to hit 0.7888.
Trade looked likely to remain subdued on Tuesday, with no significant economic data releases on the calendar, while volumes were light with many market participants on summer holidays.
GBP/USD hit 1.5778 during European afternoon trade, the pair’s highest since June 20; the pair subsequently consolidated at 1.5754, adding 0.28%.
Cable was likely to find support at 1.5673, the low of August 17 and resistance at 1.5847, the high of May 22.
Sentiment was boosted after the U.K.’s Telegraph newspaper said earlier that it could confirm weekend reports that the European Central Bank may set a cap on peripheral euro zone bond yields at its next policy meeting in September.
On Monday, the ECB dismissed the reports, saying it was “misleading” to report on decisions which have not yet been taken.
Speculation over the possibility of ECB intervention saw Spanish borrowing costs fall at an auction of short-term government debt, with Madrid successful auctioning EUR4.5 billion of bills, the top end of the target range.
Investors were also eyeing a series of highly anticipated euro zone meetings later this week, amid hopes that leaders would make some progress on steps to the stem the crisis in the region.
Luxemburg’s Prime Minister Jean-Claude Juncker, who also heads the group of euro zone finance ministers, was to hold talks with Greek Prime Minister Antonis Samaras on Wednesday, to discuss a two-year extension of the country’s economic reform program.
German Chancellor Angela Merkel is to meet with French President Francois Hollande on Thursday, while Antonis Samaras is to meet with the French and German leaders later in the week.
In the U.K., the National Statistics Office said that public sector net borrowing posted a surplus of GBP1.8 billion in July, compared to a deficit of GBP12.2 billion in June.
Analysts had expected U.K. public sector net borrowing to post a surplus of GBP2.5 billion in July.
The U.K. has now borrowed GBP47.2 billion in the current financial year, over GBP11 billion more than a year ago.
Sterling was lower against the euro with EUR/GBP rising 0.39%, to hit 0.7888.
Trade looked likely to remain subdued on Tuesday, with no significant economic data releases on the calendar, while volumes were light with many market participants on summer holidays.